The World Bank has told President Emmerson Mnangagwa that his vision 2030 and the goal of Zimbabwe becoming an upper middle-income country (UMIC) by 2030 required reforms in several economic sectors including harmonising the informal and formal sectors and removing price and exchange rate distortions.
“Achieving Zimbabwe’s vision 2030 and the ambitious goal of becoming an upper middle-income country (UMIC) by 2030 will require significant acceleration of productivity growth and focus on ensuring the creation of quality jobs,” read part of the latest World Bank Country Economic Memorandum (CEM).
The institution further told Zimbabwean authorities that there was a need to formalise the informal institutions that are contributing significantly to the economy.
“In Zimbabwe, informal workers are concentrated in critical sectors of the economy: agriculture, mining, and tourism. Despite these sectors’ importance to the economy, they present less opportunity for the country to move the economy up the value-added chain or provide higher-quality jobs for workers.
“….. Zimbabwe’s growth performance has been challenged by its large informal sector, complicating productivity growth, effectiveness of policies, and long-term development. At the macroeconomic level, pervasive informality limits the tax base and constrains the government’s ability to mobilize domestic resources.
Stella Ilieva, World Bank Senior Economist and lead author of this report said the Southern African country’s economy had potential to improve.
“Zimbabwe possesses significant, unrealized potential. The country can achieve steady and rapid economic growth, given its abundant natural resources, highly educated workforce, and strong entrepreneurial culture.
“Moreover, with further investment, Zimbabwe’s public infrastructure can support future growth,” she said.
The World Bank also slammed Zimbabwe for allowing internet providers to charge exorbitant charges.
“Additionally, Zimbabwe charges significantly higher broadband prices than comparator countries. If Zimbabwe is to move up the value chain and focus on advanced manufacturing and services, the country needs to address service challenges such as unaffordable internet access.
“There are two pathways for boosting trade to scale-up productivity: support export diversification and participation in GVCs—such policies will involve developing linkages between downstream and upstream firms through supplier linkage programs and also incentives that allows R&D expenditures to be offset against taxes; enhance participation in regional integration—these policies will involve implementing the tariff reductions required within the African Continental Free Trade Area agreement,” read the report.
Local economist Tinashe Murapata supported the report and said:
“Have gone through the World Bank Country Economic Memorandum (CEM).
“It correctly identifies Zim human capital as its advantage. But the crisis in Zim has jeopardized its success. As a society it’s time we focus on Jobs.
“The Government of Zimbabwe must stop its favoritism and focus on job creation,” Murapata said.